Financial Results for the Second Quarter Ended April 30, 2019
[Japan GAAP] (Consolidated)
Date:

June 5, 2019

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: June 12, 2019
Date for Dividend Payment:

July 4, 2019

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Yes
Briefing Session for Quarterly Operating Results: Yes (for institutional investors)* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Second Quarter Ended April 30, 2019(1) Results of Operation (Consolidated)

Quarter Ended April 30, 2019
Quarter Ended April 30, 2018

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
22,136
5.8
1,700
28.9
1,713
27.3
20,923
6.8
1,319
23.6
1,346
28.6

Quarter Ended April 30, 2019
Quarter Ended April 30, 2018

Net Income Attributable to
Owners of the Parent
Millions of
Yen
Percent
1,151
29.5
889
33.1

Net Income per Share

Fully Diluted Quarterly
Net Income per ShareYen
115.41
89.14

Yen
-

(Note) Comprehensive income
Second Quarter ended April 30, 2019: 1,111 million yen (19.5%)

Second Quarter ended April 30, 2018: 930 million yen (0.7%)(2) Financial Condition (Consolidated)

Quarter Ended April 30, 2019Year Ended October 31, 2018

Total Assets (A)(Millions of Yen)
38,47837,331Net Assets (B)(Millions of Yen)
28,74327,876

Net Assets Ratio(B) / (A) (Percent)
74.7
74.7

(Reference) Net assets
Second Quarter ended April 30, 2019: 28,743 million yen

Year Ended October 31, 2018: 27,876 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2018Year Ending October 31, 2019Year Ending October 31, 2019 (Prospect)First
Quarter-Interim
Term
22.50
23.50

Annual Dividend (Yen)Third
End ofQuarter
Fiscal Year
24.50

(Note) Revisions since the most recently released dividend projection: None

-

23.50

Annual
47.00
47.00

3. Forecast for Earnings for the Year Ending October 31, 2019 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year
42,200
-0.4
2,300
-3.3
2,300
-1.5
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,500
-0.9
150.33(Note) Revisions since the most recently released dividend projection: None
Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of simplified accounting method and the specific accounting method: None
(3) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: None
2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At April 30, 2019: 10,533,200 shares

At October 31, 2018: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At April 30, 2019: 554,861 shares

At October 31, 2018: 554,861 shares

3) Number of average shares (accumulated quarterly total)
At April 30, 2019: 9,978,339 shares

At April 30, 2018: 9,978,383 shares*The quarterly earnings report is exempt from the quarterly review by certified public accountant or audit firm.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could
differ materially due to various factors.
Please refer to the Financial Results for the Quarter (Attachments) on page 3, (3) [Analysis of Future Forecast on
Quarterly Consolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating
Results] for the operating results forecast.

Table of Contents (Supporting Data)

1. Qualitative Information on Quarterly Consolidated Operating Results....................................................2(1) Analysis of Operating Results................................................................................................................................2(2) Analysis of Financial Condition..............................................................................................................................3(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast.......................................................3
2. Quarterly Consolidated Financial Statement and Notes.................................................................................................4(1) Quarterly Consolidated Balance Sheet. ................................................................................................4(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
Income......................................................................................................................................6
Quarterly Consolidated Statements of Income.....................................................................................................6
Quarterly Consolidated Statements of Comprehensive Income.........................................................................7(3) Quarterly Consolidated Statements of Cash Flows………………………………………………..8(4) Notes on Quarterly Consolidated Financial Statements……………………………………………………10(Note for premise of going concern)…………………………………………………………….…10(Notes for significant changes in shareholder’s equity)…………………………………………. ………….. 10(Additional information).................................................................................................................. 10(Segment information) ………………………………………………………………………………... 10

1

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
During the consolidated second quarter under review, Japan’s economy seemed to reach a pause, including a dropin exports against the backdrop of a slowdown in the overseas economy, particularly in China, and declines inpersonal consumption and capital investment, even though housing investment and investment in public works
continued at a robust pace. Overseas, however, despite the ongoing recovery of the U.S. economy, Europe’s
economy continued to be sluggish and the growth rate of China’s economy remained slack. In the months ahead,
the rising sense of uncertainty surrounding the global economy resulting from circumstances such as further
heightened trade friction between the U.S. and China and Great Britain’s pending withdrawal from the EU will require
careful attention.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated second quarter
increased 5.8% from the same period last year to 22,136 million yen, reflecting significant increase of net sales
in the Machinery & Equipment Business despite lower net sales in the Chemical Product Business. From theearnings aspect, operating income was 1,700 million yen, 28.9% up from the same period last year because ofhigher profit in the Machinery & Equipment Businesses, while ordinary income came to 1,713 million yen, 27.3% up
from the same period last year. Net income attributable to owners of the parent was 1,151 million yen, 29.5% up
from the same period last year.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, net sales of works in all fields, machinery for domestic private sector
demand, and machinery, components and repair services for domestic public sector demands decreased, but on
the other hand net sales of components and repair services for domestic private sector demand, and machinery,components and repair services for overseas demand were robust. As a result, net sales for consolidated second
quarter year-to-date period were 6,629 million yen, 26.9% up from the same period last year.
With respect to earnings, operating income was 945 million yen, 165.7% up from the same period of the prior year,
mainly because of increased profits in the field of components and repair services with high margins for overseas.
(Chemical Products Business)
In the Chemical Products Business, net sales of materials for housing and construction applications in the industrial
materials sector increased, but on the other hand net sales of transport materials for semiconductor manufacturing
applications in the electronics materials sector, and other sectors decreased. As a result, net sales for consolidated
second quarter year-to-date period were 15,507 million yen, 1.2% down from the same period last year.
With respect to earnings, operating income was 754 million yen, 21.6% down from the same period of the prior year,
because of declined gross-profit margin and increased selling costs.

2(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Total assets as of the end of the consolidated second quarter under review were 38,478 million yen, increased by
1,146 million yen from the end of the previous consolidated fiscal year. This mainly reflected decreased notes andaccounts receivable–trade, and merchandise and finished goods, and increased cash and deposits, andelectronically recorded monetary claims.
Liabilities were 9,735 million yen, increased by 279 million yen from the end of the previous consolidated fiscal year,
mainly because of decreased notes and accounts payable-trade and provision for bonuses, and increased
electronically recorded monetary debt, advances received, and allowance for product warranty.
Net assets stood at 28,743 million yen, increased by 867 million from the end of the previous consolidated fiscal
year. This mainly reflected an increase in retained earnings recorded under quarterly net income attributable toowners of the parent.
As a result of the above changes, the equity ratio at the end of the consolidated second quarter under review
stood at 74.7%, the same ratio as at the end of the previous consolidated fiscal year.
[2] Cash Flow Status
Cash and cash equivalents (“cash”) as of the end of the consolidated second quarter under review decreased by
1,528 million yen from the end of the previous consolidated fiscal year to 7,825 million yen, despite positive cash flow
provided by operating activities, reflecting expenditures for both investment and financing activities. The status ofeach consolidated cash flow and their factors during the second quarter are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash provided by operating activities during the consolidated second quarter under review totaled 1,965 million
yen. Payment of income taxes was 502 million yen, and provision for bonuses decreased by 255 million yen,income before income taxes decreased by 1,707 million yen, and inventory decreased by 511 million yen. Net
cash provided by operating activities increased by 1,670 million yen compared to 294 million yen provided for thesame consolidated quarter year-to-date period of the previous year.
(Net Cash Provided by (Used in) Investing Activities)
Net cash used by investing activities during the consolidated second quarter under review reflected expenditures
totaling 3,237 million yen. This reflected a difference of 3,000 million yen between deposits and disbursements totime deposits. Net cash used by investing activities increased by 1,111 million yen compared to 2,125 million yen
used for the same consolidated quarter year-to-date period of the previous year.
(Net Cash Provided by (Used in) Financing Activities)
The decrease in cash as a result of financing activities during the consolidated second quarter under review cameto 244 million yen. This reflected the payment of cash dividends of 244 million yen. Net cash used in investing
activities increased by 19 million yen compare to 224 million yen used for the same consolidated quarteryear-to-date period of the previous year.
(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2019 thatwere announced in the “Notice on changes in earnings forecast” released on May 31, 2019.

3

2. Quarterly Consolidated Financial Statement and Notes(1) Quarterly Consolidated Balance Sheets (Second Quarter)(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2018)(April 30, 2019)

AssetsCurrent Assets
Cash and Deposits

9,354,256

10,825,779

Notes and Accounts Receivable-Trade

11,834,551

11,098,994

Electronically Recorded Monetary Claims

2,183,842

3,032,821

Merchandise and Finished Goods

3,685,115

3,312,539

Work in Process

981,660

806,228

Raw Materials and Supplies

667,846

704,474

Others183,711

237,687

Allowance for Doubtful Accounts
Total Current Assets-67,114-65,70728,823,870

29,952,818

4,459,308

4,481,736

Accumulated Depreciation-1,831,356-1,896,135

Buildings and Structures, Net

2,627,951

2,585,600

Machinery, Equipment and Vehicles

3,697,837

3,810,169-3,304,595-3,320,174

393,242489,995

1,931,089

1,930,921

10,606－980,958

1,007,649-901,758-927,374

79,19980,2755,042,089

5,086,792

109,792

106,338

Investment Securities

1,374,561

1,342,701

Guarantee Deposits

340,386

345,274

1,554,938

1,561,529

Deferred Tax Assets

16,436

12,907

Others

92,654

93,254

Allowance for Doubtful Accounts-22,871-22,881

Total Investments and Other Assets

3,356,107

3,332,785

Total Noncurrent Assets

8,507,988

8,525,916

Total Assets

37,331,859

38,478,734

Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets4

(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2018)(April 30, 2019)

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

4,193,451

3,898,678

Electronically Recorded Monetary Debt

1,857,112

2,142,481

Accounts Payable-Others

600,382

672,686

Income Taxes Payable

539,919583,350

Advances Received

70,030265,463

Provision for Bonuses

1,081,025

825,704

Provision for Directors' Bonuses

70,00034,014

Allowance for Product Warranty

160,295

332,598

Others217,988319,2138,790,206

9,074,190

Total Current Liabilities
Noncurrent Liabilities
Provision for Directors' Retirement Benefits

5,460

5,460

Net Defined Benefit Liabilities

57,90560,294

Deferred Tax Liabilities

601,913595,270

Total Noncurrent Liabilities

665,279

661,024

Total Liabilities

9,455,485

9,735,214

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

24,953,779

25,860,872-363,977-363,977

Total Shareholders’ Equity

27,134,422

28,041,514

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

433,098

408,618130953

Foreign Currency Translation Adjustment

186,221

180,436

Total Adjustment on Net Defined Benefit

122,501

111,997

Total Accumulated Other Comprehensive Income

741,950702,005

Total Net Assets

27,876,373

28,743,520

Total Liabilities and Net Assets

37,331,859

38,478,734

Net Assets
Shareholders’ Equity
Capital Stock

Treasury Stock5(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended
April 30, 2018
20,923,688

Second Quarter Ended
April 30, 201916,246,088

16,928,304

4,677,600

5,207,919

3,358,185

3,507,279

1,319,414

1,700,640

Interest Income

958

786

Dividends Income

11,307

13,297

Rent Income

3,440

3,585

Foreign Exchange Gain

18,794

12,183

Others

18,506

16,44553,00946,297

Interest Expenses

13,497

20,908Commission Paid

7,487

7,487

Sales Discount

2,854

3,591

Others

2,326

1,768

Total Non-Operating Expenses

26,16633,756

Ordinary Income

1,346,257

1,713,181

－

5,550

－

5,550

1,346,257

1,707,631

Income Taxes-Current

422,926

542,534

Income Taxes-Deferred

33,864

13,535

Total Income Taxes

456,790556,069

Net Income or Net Loss (-)

889,467

1,151,561

Net Income or Net Loss (-)

889,467

1,151,561

Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Income

22,136,224

Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Extraordinary Losses
Loss on Evaluation of Investment Securities
Total Extraordinary Losses
Income before Income Taxes and Minority Interests

Attributable to Owners of the Parent

6

Quarterly Consolidated Statements of Comprehensive Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended
April 30, 2018
889,467

Net Income

Second Quarter Ended
April 30, 2019
1,151,561

Other Comprehensive Income
20,642-24,480

Deferred Gains or Losses (-) on Hedges

784

822

Foreign Currency Translation Adjustment-14,591-5,785

Net Defined Benefit

34,120-10,503

Total Other Comprehensive Income

40,955-39,945

Comprehensive Income

930,422

1,111,615(Breakdown)Comprehensive Income Attributable to Owners of the
Parent930,422

1,111,615

Valuation Difference on Available-for-sale Securities7(3) Quarterly Consolidated Statements of Cash Flows(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2018

April 30, 2019

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes

1,346,257

1,707,631

Depreciation and Amortization

193,508

177,632

Increase (Decrease) in Provision for Bonuses(237,479)(255,091)

Increase (Decrease) in Provision for Directors' Bonuses(34,258)(35,986)

Increase (Decrease) in Allowance for Product Warranty(21,106)

172,303

Increase (Decrease) in Net Defined Benefit Liability

1,907

2,388

Decrease (Increase ) in Net Defined Benefit Asset

2,045(14,159)

Increase (Decrease) in Allowance for Doubtful Accounts(5,464)57

Interests and Dividends Income(12,266)(14,083)

Interest Expenses

13,497

20,908Foreign Exchange Losses (Gains)

57,787

19,716(417,848)(107,744)

Decrease (Increase) in Inventories(852,828)

511,229

Increase (Decrease) in Notes and Accounts Payable-Trade339,322(13,773)－

5,550

Increase (Decrease) in Accounts Payable-Others

38,76057,030

Increase (Decrease) in Advances Received

163,205

196,088

Others, Net

112,953

44,646

687,9932,474,344

Interests and Dividends Income Received

12,08014,030Interest Expenses Paid

(13,504)(20,915)

Income Taxes Returned (Paid)(392,121)(502,397)

Net Cash Provided by (Used in) Operating Activities

294,446

1,965,061

Decrease (Increase) in Notes and Accounts
Receivable-Trade

Valuation Difference in Investment Securities (Gains)

Sub Total8

(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2018

April 30, 2019

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits(2,000,000)(6,000,000)

Withdrawal from Time Deposits－

3,000,000(95,417)(199,281)－

935

Purchase of Intangible Fixed Assets(19,493)(20,953)

Purchase of Investment Securities(10,018)(10,546)

Payments of Loans Receivable(1,390)(2,040)

Collection of Loans Receivable

2,110

1,895

Guarantee Deposits (Increase)(2,149)(5,622)542(1,757)(2,125,817)(3,237,370)

Cash Dividends Paid

(224,513)(244,469)

Net Cash Provided by (Used in) Financing Activities(224,513)(244,469)(48,900)(11,699)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period(2,104,785)(1,528,476)

7,893,336

9,354,256

Cash and Cash Equivalents at End of This Quarter

5,788,551

7,825,779

Purchase of Property, Plant and Equipment
Proceeds from Sales of Property, Plant and Equipment

Others, Net
Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities

Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash
Equivalents9(4) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Additional information)
Beginning from the first quarter consolidated accounting period, the Company has applied the Partial Revision of“Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan Statement No. 28), andhas classified the deferred tax assets in Investments and Other Assets and the deferred tax liabilities in
Noncurrent Liabilities.
(Segment Information, etc.)
Second Quarter Ended April 30, 2018
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

5,223,166

15,700,521

20,923,688

20,923,688

-

-

-

-

5,223,166

15,700,521

20,923,688

20,923,688

355,924

963,489

1,319,414

1,319,414

Total

Grand Total(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

Second Quarter Ended April 30, 2019
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

6,629,012

Total

Grand Total

15,507,212

22,136,224

22,136,224

-

-

-

-

6,629,012

15,507,212

22,136,224

22,136,224

945,684

754,956

1,700,640

1,700,640(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

10